Fair Isaac Corporation (FICO): a likely value trap?

Avoid — regulators just ended FICO's 30-year mortgage-scoring monopoly, and the "cheap" P/E reflects earnings that are now at real risk.

⚠ TRAP Fundamentals79/100

Fell 38% in 10 trading day(s) — now $617.87

Why FICO dropped

A federal housing regulator (FHFA) ordered Fannie Mae and Freddie Mac to stop giving FICO scores special pricing treatment and put rival VantageScore on equal footing — this is directed at dismantling a three-decade monopoly over credit scoring for government-backed mortgages, a market representing approximately 70% of all U.S. mortgage originations. Making it worse, competitor TransUnion is locking in 99-cent VantageScore pricing through 2028, directly undercutting FICO's per-score fees, and analysts noted FICO's 97% mortgage revenue growth was pure price inflation, not volume, and management's own words signal that pricing lever is now breaking.

Fwd P/E 11.8Op margin 53.8%Rev growth 25.7%Debt/equity —Analyst upside 103.3%

How this scored 79/100

✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.

✅ Makes money Net profit margin 34.1%

✅ Generates cash Free cash flow $774M

✅ Not drowning in debt Debt/equity unknown (limit 200%)

✅ Can pay its bills Current ratio 1.2 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 19/25

Operating margin 53.8% 9/9

Net profit margin 34.1% 8/8

Return on equity unknown 2/8

Growth Is it getting bigger, or dying? 25/25

Revenue growth 25.7% 9/9

Earnings growth 41.2% 8/8

Expected profit change 107.1% 8/8

Value Is it cheap right now? 24/25

Forward P/E 11.8 9/10

PEG ratio 0.5 8/8

Analyst target upside 103.3% 7/7

Balance sheet Will it survive? 11/25

Debt / equity unknown 3/10

Current ratio 1.2 1/8

Free cash flow $774M 7/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-09-30. Research only — not financial advice.